Lawsuit against Meta invokes modern portfolio theory to protect shareholders
corpgov.law.harvard.edu
Lawsuit against Meta invokes modern portfolio theory to protect shareholders
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Re: Lawsuit against Meta invokes modern portfolio theory to protect shareholders
#2In simple terms, investors are suing because even though they might have made a boatload of cash from their investments in Meta, they ended up with a net loss overall because what Meta did to pump up the stock value ended up destroying the value of a lot of other things the investors had in their portfolios.
Re: Lawsuit against Meta invokes modern portfolio theory to protect shareholders
#3In simple terms, investors are suing because even though they might have made a boatload of cash from their investments in Meta, they ended up with a net loss overall because what Meta did to pump up the stock value ended up destroying the value of a lot of other things the investors had in their portfolios.
Wow, this seems bananas. The loss in value isn’t even other investment, but rather “mental health issues for millions of users and increasingly negative political rhetoric, while facilitating ethnic cleansing, drug cartels, modern slavery, and vaccine disinformation”
Re: Lawsuit against Meta invokes modern portfolio theory to protect shareholders
#4In simple terms, investors are suing because even though they might have made a boatload of cash from their investments in Meta, they ended up with a net loss overall because what Meta did to pump up the stock value ended up destroying the value of a lot of other things the investors had in their portfolios.
It seems to me that if you owned the companies outright something like preventing one company from harming the value of the other could easily be illegal collusion and monopolizing.
I doubt they’ll win this one but if they do it would be hilariously amusing.
Re: Lawsuit against Meta invokes modern portfolio theory to protect shareholders
#5I can't speak to the legalese, but on the surface the complaint sounds ridiculous.
> The complaint alleges that the Meta directors failed to consider that shareholders with diversified portfolios may be subject to net losses from Meta’s pursuit of a business model that maximizes advertising revenue without regard to the harms it inflicts on the rest of their portfolios. In particular, the complaint identifies press reports establishing that the company knew that its conduct was leading to mental health issues for millions of users and increasingly negative political rhetoric, while facilitating ethnic cleansing, drug cartels, modern slavery, and vaccine disinformation. These activities pose risks to political stability, public health, and rule of law, threatening the intrinsic value of the global economy and thus the value of diversified portfolios.
Is there any company in existence that would clear this bar?
Re: Lawsuit against Meta invokes modern portfolio theory to protect shareholders
#6In simple terms, investors are suing because even though they might have made a boatload of cash from their investments in Meta, they ended up with a net loss overall because what Meta did to pump up the stock value ended up destroying the value of a lot of other things the investors had in their portfolios.
Reading the article, it sounds more like someone really wants to get an ESG precedent established.
Re: Lawsuit against Meta invokes modern portfolio theory to protect shareholders
#7This seems totally insane to me. The lawsuit is arguing that directors not only have a fiduciary responsibility to shareholders to increase the value of their Meta holdings, but also of other stocks they may own.
The consequences of that line of thinking are scary. I'm sure the vast majority of shareholders of most US companies own ICE cars. If a company decides to put a lot of effort into, for example, cheaper batteries, could shareholders sue because the company is devaluing an asset most of them own?
This totally smells like a lawyer trying a random, BS theory in the hope that something "sticks" in order to make their mark.
Re: Lawsuit against Meta invokes modern portfolio theory to protect shareholders
#8I can't speak to the legalese, but on the surface the complaint sounds ridiculous. > The complaint alleges that the Meta directors failed to consider that shareholders with diversified portfolios may be subject to net losses from Meta’s pursuit of a business model that maximizes advertising revenue without regard to the harms it inflicts on the rest of their portfolios. In particular, the complaint identifies press r…
Lawsuits like this are just political theater, abusing the court system to publicize a particular social issue. The plaintiffs know they have no hope of winning a judgment, but if they can bring enough negative publicity to Meta then the company might actually change some policies.
Re: Lawsuit against Meta invokes modern portfolio theory to protect shareholders
#9In simple terms, investors are suing because even though they might have made a boatload of cash from their investments in Meta, they ended up with a net loss overall because what Meta did to pump up the stock value ended up destroying the value of a lot of other things the investors had in their portfolios.
That is not what I gathered, but I invest in dirt so who knows.
What I gathered, is that the facebook decisions impacted non-facebook stocks, facebook not only should have known but also are responsible as fiduciary to the stock holders.
In short, besides you, I bought your competitor, you should have known I bought them, your actions now crushed your competitor, I lost a boatload on them, you are responsible.
> The complaint alleges that the Meta directors failed to consider that shareholders with diversified portfolios may be subject to net losses from Meta’s pursuit of a business model that maximizes advertising revenue without regard to the harms it inflicts on the rest of their portfolios. In particular, the complaint identifies press reports establishing that the company knew that its conduct was leading to mental health issues for millions of users and increasingly negative political rhetoric, while facilitating ethnic cleansing, drug cartels, modern slavery, and vaccine disinformation. These activities pose risks to political stability, public health, and rule of law, threatening the intrinsic value of the global economy and thus the value of diversified portfolios. (As diversified portfolios represent a slice of the economy, reducing the value of the global economy inevitably reduces portfolio value.
Re: Lawsuit against Meta invokes modern portfolio theory to protect shareholders
#10Hopefully the case gets summarily tossed for lack of standing. The idea that one company's decisions would have such tangible and personally-harmful (to "my portfolio") effects due to "negative political rhetoric, while facilitating ethnic cleansing, drug cartels, modern slavery, and vaccine disinformation" would open up every company to diffuse claims of responsibility.